Sunday, November 19, 2006

Russia gets into the WTO with US backing

The U.S. and Russia signed terms today for Russia to join the World Trade Organization.

The 800 page agreement was signed, (ironically in Hanoi) at the annual summit of the Asia Pacific Economic Conference by U.S. Trade Representative Susan Schwab and Russia's Economy Minister German Gref. Joining the WTO is expected to add at least $10 billion a year to Russia's economy.

According to Schwab,Russia "belongs as a fully-fledged member of the WTO" and the signing is "an important milestone." The Russians have the last major economy that's not a member of the WTO.

They've been trying to join for over a decade to join the WTO, which sets international trade and investment rules. Joining the WTO provides a number of trade advantages to its members and signifies that a country has `arrived' economically..which tranlates into lotsa moolah.

What interests me, of course, is what the behind the scenes scenario was. President Bush, as regular members of Joshua's Army know, blocked Russia's entry into the WTO just last July, when Russia hosted the the Group of Eight summit in St. Petersburg.

Now, while Russia agreed to lower tariffs and increased the access for US companies, its no secret that US relations with Russia are on the outs, mostly over Russia's bulding nuclear facilities for Iran and refusing to go along with UN sanctions on the Mullahs and because of Russia's nasty conflicts with some of the newly independent countries that used to be part of the Soviet Empire.

Did Bush and Putin strike a deal on these little items? And more importantly, can the US rely on anything Putin or the Russians might agree to?

Some of you might remember that Russia signed on to the UN sanctions against Saddam's Iraq..and we saw how well the Russians and others observed that agreement.

Any UN sanctions against Iran will be worthless.

Perhaps President Bush is merely seeking the sanctions as diplomatic, face-saving wallpaper.Especially since it's doubtful at this point that he's willing or able to do anything meaningful to stop Iran from going nuclear, thanks to the fumbling in Iraq. And the Russians, after all, have long experience in signing agreements to do one thing and then doing exactly what they please in fact.

It's not a done deal yet. Prospective members of the WTO need to work out agreements with all 57 individual members, plus Russia must undertake general talks with the WTO members as a whole. It must also overcome opposition from WTO members and former parts of the Soviet empire Georgia and Moldova, which Russia has been bullying and has disputes with.

The U.S. Congress, may also block support of the accord, and since a lot of pork barrel issues are involved, passing it may not be a done deal. A lot of Democratic members of the new Congress might just get a real thrill from blocking anything proposed by the Bush administration.

Russia is one of the largest non-OPEC producers of oil and gas, a major agricultural nation,and a major producer of lumber, commercial fishing, and minerals (gold, cesium, platinum, etc.).

Not to mention arms sales and putting up nuclear facilities.

Of course, due to the wholesale destruction of the economy and their workforce during the Cold War by the Soviets , their economy was severely crippled.

Thanks to massive aid by Bush `41, Clinton and of course the current occupant of the White House, and masive tax incentives for American businesses to invest there, the Russian economy has rebounded nicely, and they will be much more of a problem should they seek revenge on the US in the future for divesting them of the Soviet empire.